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However, in such cases the courts have to inspect the exemption clause cautiously in order to

come to a decision whether it protects or not the carrier. It should additional be made
apparent that the effect of the exemption clause depends on the manner of drafting the clause
itself and if the clause is not clear or does not specially mention unseaworthiness, especially
where the obligation of seaworthiness is implied, then the court would not apply it to absolve
the carrier of its liability. Furthermore, when the Hague/Hague-Visby Rules apply to the
contract for carriage of goods, the carrier cant exhaust the defence as provided in Article IV
Rule 2 if the loss was caused by unseaworthiness which ensued from his failure to exercise
due diligence to make the vessel seaworthy, because the responsibility to exercise due
diligence is paramount in such contracts.1 Also under Article 5 (1) Hamburg Rules, the carrier
will not be able to absolve himself from his liability if he is unable to prove that he and his
assigns took all reasonable measures to avoid the occurrence and its consequences.
Exclusion clause:
In order for the insured to be able to use the defence of the exclusion clause its language
should denote its meaning without any room for doubt. However we should differentiate
between two situations i.e. one where the duty of seaworthiness is express one and the other
where it is implied. If the contract specifically mentions the duty of seaworthiness, 2 the
exclusion clause in the contract of carriage will extend to include breach of the duty, provided
appropriate language is used in making of the clause. Usually such exclusion covers
unseaworthiness that arises after the voyage has commenced, and if the carrier wants to
include seaworthiness existing before and at the beginning of the voyage then this should be
stipulated clearly. In Bank of Australasia v. Clan Line Steamers,3 a stipulation in the bill of
lading provided that The shipowner shall be responsible for loss or damage arising out of
unfit state of the vessel to receive the goods, or any unseaworthiness of the vessel when she
sails on the voyage. Another clause stated that No claim that may arise in respect of
goods shipped by this steamer will be recoverable unless made at the port of delivery within
1 Maxine Footwear Co. Ltd. and Another. Appellants; v. Canadian Government
Merchant Marine Ltd, [1959] A.C. 589.
2 Bank of Australasia and Others v. Clan Line Steamers, Limited, [1916] 1 K.B.
3 Id.

seven days from the date of the steamer's arrival there. The duty to provide a seaworthy ship
was expressly mentioned in the carriage contract by virtue of this specific clause. The cargoowner received his cargo in a damaged state; however, he failed to make the claim within the
mentioned period of seven days, arguing that the clause does not apply to damage arising
from the failure of the carrier to provide a seaworthy vessel. The court did not accept this
argument and held the clause applicable to loss arising from unseaworthiness of the vessel.
Buckley L. J. stated :
It seems to me that in this case clause 14 has expressly introduced that which would
otherwise be implied, and that therefore the obligation as regards seaworthiness in
this case rests upon express contract and not upon implied contract. The relevance of
that for the present purpose is this. The clause of limit of liability, according to
Tattersall's Case, would not extend to the implied contract if it were implied; but if it
is expressed, then such stipulation of the contract is to be applied to that part of the
contract as well as to any other part. The result is that Tattersall's Case does not
apply in this case. There is here an express contract as to unseaworthiness.
Consequently clause 12 applies.4
In cases where the obligation of seaworthiness is implied the insured cannot seek the resort to
general exemption clause as it will not suffice to cover the breach of the obligation. A similar
situation arose in Atlantic Shipping v. Louis Dreyfus & Co,5 in this case again there was a
stipulation limiting action by way of suit within a particular time frame. A clause of the
charterparty read as follows: All disputes from time to time arising out of this contract shall,
unless the parties agree forthwith on a single arbitrator, be referred to the final arbitrament of
two arbitrators carrying on business in London, who shall be members of the Baltic and
engaged in the shipping and/or grain trade, one to be appointed by each of the parties, with
power to such arbitrators to appoint an umpire. Any claim must be made in writing, and
claimants' arbitrator appointed within three months of final discharge, and where this
provision is not complied with the claim shall be deemed to be waived and absolutely

4 Id.
5 Atlantic Shipping & Trading Company v. Louis Dreyfus & Co., (1922) 10 Ll. L.
Rep. 707.

The charterparty did not contain any express requirement of seaworthiness. A disagreement
arose over loss of cargo resulting from the vessel being unseaworthy, and the cargo-owner
failed to appoint an arbitrator within the specified time limit. To this the shipowner argued
that the charterers waived off their right to claim damages. Lord Sumner, expressed his
opinion that since the shipowners duty is an implied one, if he is able to prove that he
fullfilled his obligation to provide a vessel which is seaworthy in all aspects then he will be
able to use the protection provided as provided in the clause, but if he has failed to discharge
his duty then the exception will not apply. He further observed that:
there is an implied condition upon the operation of the usual exceptions from
liability, namely, that the shipowners shall have provided a seaworthy ship. If they
have, the exceptions apply and relieve them; if they have not, and damage results in
consequence of the unseaworthiness, the exceptions are construed as not being
applicable for the shipowners' protection in such a case.6

6 Id.